Fulfillment For Amazon

Tech Retail Giant Picks Long Island City For New Headquarters As Governor And Mayor Unite Against Critics And Tout The Deal As Win For The People

Gov. Andrew Cuomo and New York City Mayor Bill de Blasio are rarely on the same page, but they are repeating the same talking point about the deal to bring Amazon’s new corporate headquarters to Long Island City. That talking point is 9 to 1.

The governor and mayor say the nearly $3 billion in tax breaks, grants and other incentives will get paid back to the city and the state ninefold, creating an estimated $27.5 billion in total revenue during the next 25 years.

“This is the largest economic development initiative ever done by city or state or the city and state together,” Cuomo said at a press conference in Manhattan on Tuesday. “This costs us nothing. We make money doing this,” Cuomo added.

The message was echoed by de Blasio, who said this deal is going to improve the quality of living in Queens and New York City as a whole.

“We don’t measure success in corporate profits. We measure success in how many everyday people are bettered. This plan will better many people’s lives,” de Blasio said.

The deal as structured in a memorandum of understanding (MOU) between Amazon and both the New York City Economic Development Corporation (NYCEDC) and the Empire State Developments (ESD) says the state will offer $1.5 billion in state incentives in exchange for Amazon’s pledge to invest $2.5 billion and create 25,000 jobs in the next 10 years. The deal expands to $1.7 billion in state incentives if Amazon creates 40,000 jobs and invests close to $3.7 billion over 15 years. Additionally, the city will provide up to $1.285 billion in incentives. The estimated average salary for each job is more than $150,000.

The state incentives include $505 million in grants, which are tied to money spent by Amazon to develop sites along the East River. According to the MOU, those incentives will start next year, with Amazon pledging to invest $64.5 million and receiving a $33.4 million grant. During the next five years, Amazon is looking to spend roughly $1.1 billion and will receive roughly $168 million in state grants.

Over a period of 25 years, the state is also expected to give Amazon $1.2 billion in excelsior tax cuts. The city would chip in $897 million through its Relocation and Employment Assistance Program (REAP), and another $388 million through its Industrial & Commercial Abatement Program (ICAP).

The governor and mayor estimate that the total number of jobs created over the next 25 years would be 107,089 when factoring in direct employment at Amazon and indirect jobs created through Amazon’s influx in investment.

John Schoettler, Amazon VP for Global Real Estate and Facilities, said the deciding factor for the company was being in a place where it had access to diverse talent.

“When we start hiring next year, we will be able to hire top-tier talent,” he said.

De Blasio added that the city projects the job creation will add $13.5 billion in tax revenue during the next 25 years.

“We are a city that believes in lifting people up. We need resources to keep doing that. $13.5 billion—that’s how we do this,” de Blasio said.

While the deal is basically already done and agreed to, two powerful local lawmakers are still standing in the way. City Councilman Jimmy Van Bramer and state Sen. Michael Gianaris—who is about to become one of the most powerful lawmakers in Albany with Democrats’ winning a comfortable majority in the Chamber—said the following in a joint statement:

“New Yorkers have real unmet needs from their government. Our subways are crumbling, our children lack school seats, and too many of our neighbors lack adequate healthcare. It is unfathomable that we would sign a $3 billion check to Amazon in the face of these challenges.

“We are witness to a cynical game in which Amazon duped New York into offering unprecedented amounts of tax dollars to one of the wealthiest companies on Earth for a promise of jobs that would represent less than 3 percent of the jobs typically created in our city over a 10-year period.”

Other elected officials and community leaders have echoed these statements, arguing that the people who live in western Queens have been intentionally kept out of the loop.

Cuomo and de Blasio have countered by saying that in order to persuade Amazon to come to Long Island City, the deal had to be expedited—which will happen through ESD’s general project plans, circumventing the city’s often-tedious ULURP (Uniform Land Use Review Procedure) for land use.

Emil Skandul, founder of Manhattan-based technology firm Capitol Foundry LLC, suggested opponents should take a closer look at the deal, and its implications, before attempting to shut it down.

“I think they are missing the larger picture. Opposition is shortsighted. As we lose more jobs to automation, we have to reinvent ourselves.”

Skandul, who has worked on various tech development projects in New York City, finds the Amazon deal in line with what has been offered to other companies in the past.

“I don’t think that Amazon has received any sort of super-generous package. What it is in the MOU is what any other corporation would have received. There hasn’t really been a special project offered to Amazon,” Skandul said.

Cuomo echoed these sentiments at the Tuesday press conference, saying the state and city are always competing to lure businesses to the Empire State. Both the governor and mayor argued that giving Amazon an incentive-laced deal is important because it’s on the cutting edge of a growing industry.

“Who is attracting the businesses of tomorrow today? That is the city, state, region that will flourish in the future. Either you are creating jobs or losing jobs,” Cuomo said. “This is about being a part of the economy of tomorrow. And Amazon is a big asset in the entire tech space. I think there will be a positive synergy with the other tech companies in New York.”

One person excited about the announcement is LaGuardia Community College President Gail Mellow. One of Long Island City’s top selling points to Amazon was a well-trained and diverse workplace, which the college has, with people of color making up more than 80 percent of the student body, including more than 40 percent Hispanic students.

“To be in an ecosystem where those students can immediately access jobs with a huge and visionary company like Amazon is truly exciting,” Mellow said. “A local and a diverse workforce: That is exactly who the students of LaGuardia College are.”

Mellow praised Long Island City Partnership President Elizabeth Lusskin and Assemblywoman Cathy Nolan for bringing together stakeholders in western Queens to pitch Amazon on a vision for the area as a place where people could live and work.

According to the MOU, Amazon will begin building out a presence in Queens next year, investing $64.5 million and creating 700 jobs. By the end of 2023, the company hopes to create 11,900 jobs and invest nearly $1.1 billion in the area.